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Tax Exemptions Frequently Asked Questions (FAQs)

How can an organization be recognized as tax exempt from DC Franchise Tax, DC Sales Tax or DC Personal Property Tax?
The responsibility for establishing tax exempt shall rest upon the organization. An organization that is recognized as tax exempt by the Internal Revenue Service (IRS) is not automatically recognized tax exempt under the laws of the District of Columbia. In order to establish tax exemption, an organization shall file a Form FR-164 Application for Exemption [PDF] with the Office of Tax and Revenue, Exempt Organizations, PO Box 556, Washington, DC 20044.

What type of exempt organizations may quality for personal property tax exemption?
Semipublic institutions (IRC § 501(c) (3)) may qualify for personal property tax exemption.

What is a semipublic institution?
Semipublic institution means any corporation, and any community chest, fund or foundation, organized exclusively for religious, scientific, charitable, or educational purposes, including hospitals, no part of the net earnings of which inures to the benefit of any private shareholder or individual.

What type of exempt organizations may qualify for sales tax exemption?
Semipublic institutions may qualify for sales tax exemption provided the organization has a location/office in the District of Columbia.

What is the effective date of a personal property tax exemption?
The effective date for a personal property tax exemption shall be the July 1 following the date of the initial application request.

What type of exempt organizations may qualify for franchise tax exemption?
Generally, most organizations recognized tax exempt by the Internal Revenue Service except social clubs (IRC § 501(c) (7)).

Are exempt organizations required to collect DC sales tax on sales of tangible personal property?
Yes, even though the exempt organization is exempt from DC Sales and Use Tax on purchases of tangible personal property or services.

What are the procedures for an individual to inspect applications and related financial documents of recognized exempt organizations by the District of Columbia?
Individuals desiring to inspect applications and related financial documents of organizations that have been recognized tax exempt shall direct their request in writing to the Chief Counsel, Office of Tax and Revenue, PO Box 556, Washington, DC 20044.

If an exempt organization conducts a few yearly specific events (i.e. bake sale and other fund raising events) and is not registered to collect sales tax, call Patricia Richey, Collection division, to register for special events at (202) 442-6824.

For additional exempt organization questions, call Genevieve Menan at (202) 442-6444.